The Defence Acquisition Council has approved ₹52,000 crore for advanced weaponry, including missile systems and anti-drone technology. This procurement drive aims to modernize the armed forces while supporting domestic manufacturing goals. Major listed defense players are expected to be key participants in executing these upcoming projects.
India’s military modernization drive gained momentum as the Defence Acquisition Council (DAC) approved new capital acquisition proposals worth approximately ₹52,000 crore. The focus is shifting toward cutting-edge combat technologies, specifically electronic warfare platforms, anti-drone systems, advanced surface-to-air and anti-tank guided missiles, and jet-based loitering munitions. This procurement is part of the government’s larger strategy to enhance battlefield capabilities while reducing reliance on foreign imports.
Strategic Shift Toward Advanced Tech
This round of approvals highlights a move away from traditional hardware toward systems designed for modern, technology-driven combat. The government has earmarked ₹1.49 lakh crore for new military hardware out of a total capital budget of ₹1.8 lakh crore for the current fiscal year. The long-term objective is to scale domestic defense production to ₹3 lakh crore by 2029, supported by an aggressive push in defense exports, which reached ₹38,424 crore in the previous fiscal year.
Impact on Domestic Defense Players
Several listed companies are positioned to participate in this procurement cycle. Bharat Electronics (BEL), which specializes in defense electronics and anti-drone detection systems, reported an order book of ₹73,882 crore as of March 31, 2026. Their role in guided missile technology and electronic warfare makes them a central player in this modernization effort.
Bharat Dynamics (BDL) continues to be a major participant in the missile segment. The company maintains a high level of indigenization, between 80% and 90%, across its missile portfolio. With an order book of ₹26,176 crore, BDL’s revenue visibility is supported by consistent government demand for programs such as the Medium Range Surface-to-Air Missile (MRSAM).
Solar Industries has also emerged as a significant participant, particularly in the space of loitering munitions and warhead technology. Its defense segment revenue grew by 94% in FY26 to ₹2,634 crore. The company is currently executing a ₹6,084 crore contract for Pinaka rocket systems, indicating a shift toward higher-value defense manufacturing.
Execution and Financial Considerations
While these contracts provide long-term revenue visibility, investors typically look at the execution capability of these firms to meet stringent delivery timelines. Valuation trends differ across the sector: BEL currently trades at a different valuation multiple compared to BDL, which is often priced at a premium due to its niche focus on missile production. Solar Industries, meanwhile, shows strong growth metrics in its defense segment, though its overall order book is smaller than the larger public sector defense entities. The ability of these firms to maintain profit margins while scaling up manufacturing and managing the cost of raw materials will be important to track as these new projects move from approval to execution.